Seminario “Signaling in the presence of Tests”

Presenta: Carla Guadalupi (Ph.D. in Economics, Universidad Católica de Chile; Profesora Asistente, Universidad del Desarrollo).

Lugar y hora: 19 de Junio, 12:30 hrs en la Sala P-301, Edificio Placa (Diagonal Paraguay 257).

Abstract: We consider a signaling model in which firms not only observe the worker's costly signal, but may also acquire information. The worker's productivity depends on his type (innate skills) as well as his quality (the match between the worker and the firm). A good-type worker is more likely to be a better fit for a firm, but it will not be necessarily so. While the worker's quality is initially unknown to both the worker and the firm, the type is private information, and can be communicated through the choice of a costly action, e.g. the education level. The firm might complement this information by performing a test to learn the match between the worker and the firm. We model the firm's information acquisition problem using the rational inattention approach. We characterize the set of Perfect Bayesian Equillibria that satisfy the divinity criterion (D1). We show that depending on the prior beliefs about the worker-firm match, the unique equilibrium can be separating, pooling or semipooling. In particular, the LCSE is the only equilibrium when the expected match between the firm and the worker is low. In that case, most of the information acquisition is left to the firm. The opposite happens when the expected fit is high. When beliefs are sufficiently optimistic, firms relax their standards, and a pooling equilibrium with no education is the only equilibrium. Finally, when the expected fit is intermediate, the only equilibrium is semipooling. The good type partially signals its type, while the bad-type worker randomizing between no education and signaling.

Datos del Evento

Fecha de inicio:
19 de Junio, 2019 | 12:30 hrs.

Fecha de término
19 de Junio, 2019 | 13:30 hrs.